A hurricane appears to have hit STMicroelectronics, the Italian-French semiconductor giant. A disappointing quarterly, the collapse of the stock market price and rumors of layoffs were already enough to worry analysts and investors. But that's not all: behind the storm there would be shady maneuvers by the company's top management. According to what was reported by The print, Jean-Marc Chery, CEO of STM, and Lorenzo Big, chief financial officer (cfo), would be accused to have hidden alarm on accounts, contributing to a climate of uncertainty that weighed not only on the value of the shares, but also on the credibility of the entire group.
Stm, the accusations in the class action: incorrect forecasts and shares sold
The final twist came with the accusations of the company's former managers. According to a class action filed in the United States against Stm, the CEO and CFO were fully aware of the economic difficulties since the early months of 2023, but continued to spread optimistic forecasts, hiding the real problems of the market. The accusations do not stop there: during the same period, Chery and Grandi would also have sold company shares for a total of about 8 millions of dollars (4,1 million Chery and 3,7 million Grandi), taking advantage of the climate of “solid growth” that they had helped to create.
This story took shape in a courtroom, with the lawsuit being filed on January 21 in the Southern District Court of New York. The injured shareholders, including Faith Close, Hassan Ibrahim, Aya Zalate e Ferdinando tangle, accuse the top management of having misrepresented the financial situation, inducing the market to underestimate the seriousness of the crisis. The main accusation? The inflated numbersAccording to the lawsuit, the sale of products was manipulated through discounts excessive, without real approval, to “fill” the distribution channels and mask the economic difficulties, creating a bubble that gave the illusion of solidity.
Internal maneuvers: the struggle for power
The accusations become even more serious with the Testimonies from eight former managers of Stm, including a leader key of the division automotive – probably Marco Monti, writes The print, who left the group in January 2024. According to the statement submitted to the court, the witness would have participated in monthly meetings with about 25 senior executives, including Chery, during which market data and budget forecasts were discussed. The witness would have warned the leaders of market slowdown and the unachievability of the targets set for the third and fourth quarters of 2023. However, his warnings would have been ignored: Management continued to issue revenue forecasts for 2024 of $17 billion, only to close the year at $13 billion, marking a 50% drop from previous peaks. At that time, the Chery's term as CEO was set to expire, and the climate of uncertainty about corporate leadership seems to have pushed executives to secure their interests. In short, an attempt to "safeguard their own skin" at the expense of shareholders and employees.
Stm's future in the balance: layoffs and cuts in sight
The repercussions do not stop at the balance sheets or lawsuits. As reported by Bloomberg, the Italian-French giant is planning to reduce its workforce by 6%, a move that, if confirmed, could result in around 2.000-3.000 jobs at risk, especially in Italy and France. The Italian spokesperson told The print that "no final decisions have been taken", but the restructuring plan e cost reduction until 2027 leaves little hope for employees.
Further complicating the situation is the strategic importance of the company. Stm is not only one of the main players in the chip sector, but it is also an important piece of the Italian and European industry. In fact, 50% of the company's shares are controlled by the Ministry of Economy and Finance (Mef), which means that the crisis situation does not only concern the financial world, but also politics.
After the publication of the disastrous data, several parliamentarians of the Democratic Party urged the Italian government to intervene to protect workers and the national strategic interest. “We cannot afford to lose ground in a crucial sector like semiconductors,” they said, stressing the importance of protecting the technological and industrial autonomy of Italy and Europe.
